Irewand is on aww academic "tax haven wists", incwuding de § Leaders in tax haven research, and tax NGOs. Irewand does not meet de 1998 OECD definition of a tax haven,[5] but no OECD member, incwuding Switzerwand, has ever met dis definition, uh-hah-hah-hah. Onwy Trinidad & Tobago met it in 2017. Simiwarwy, no EU–28 country is amongst de 64 wisted in de 2017 EU tax haven bwackwist and greywist.[6] In September 2016, Braziw became de first G20 country to "bwackwist" Irewand as a tax haven, uh-hah-hah-hah.

Irewand has been associated wif de term "tax haven" since de U.S. IRS produced a wist on de 12 January 1981.[m][16] Irewand has been a consistent feature on awmost every non-governmentaw tax haven wist from Hines in February 1994,[17] to Zucman in June 2018[18] (and each one in-between). However, Irewand has never been considered a tax haven by eider de OECD or de EU Commission, uh-hah-hah-hah.[5][6] These two contrasting facts are used by various sides, to prove or disprove wheder Irewand is a tax haven, and much of de detaiw in-between is discarded, some of which can expwain de EU and OCED's position, uh-hah-hah-hah. Confusing scenarios have emerged, for exampwe:

In Apriw 2000, de FSF–IMF wisted Irewand as an offshore financiaw centre ("OFC"), based on criteria which academics and de OECD support.[19] The Irish State has never refuted de OFC wabew, and dere are Irish State documents dat note Irewand as an OFC. Yet, de terms OFC and "tax haven" are considered synonymous.[20][21][22]

In December 2017, de EU did not consider Irewand to be a tax haven, and Irewand is not in de § EU 2017 tax haven wists; in January 2017 de EU Commissioner for Taxation, Pierre Moscovici, stated dis pubwicwy.[6] However, de same Commissioner in January 2018, described Irewand to de EU Parwiament as a tax bwack howe.[15]

The next sections chronicwe de detaiw regarding Irewand's wabew as a tax haven (most cited Sources and Evidence), and detaiw regarding de Irish State's officiaw Rebuttaws of de wabew (bof technicaw and non-technicaw). The finaw section chronicwes de academic research on de drivers of U.S., EU, and OCED, decision making regarding Irewand.

As de OECD has never wisted any of its 35 members as tax havens, Irewand, Luxembourg, de Nederwands and Switzerwand are cawwed OECD tax havens;[73]

As de EU has never wisted any of its 28 members as tax havens, Irewand, Luxembourg, de Nederwands and Bewgium are cawwed de four EU tax havens.[74]

The term tax haven has been used by de Irish mainstream media and weading Irish commentators.[75][76][77][78][79] Irish ewected TDs have asked de qwestion: "Is Irewand a tax haven?".[80][81] A search of Dáiw Éireann debates wists 871 references to de term.[82] Some estabwished Irish powiticaw parties accuse de Irish State of tax haven activities.[83][84][85]

The internationaw community at dis point is concerned about de nature of tax havens, and Irewand in particuwar is viewed wif a considerabwe amount of suspicion in de internationaw community for doing what is considered - at de very weast - on de boundaries of acceptabwe practices.

Dominance of U.S. companies:[10] Irish corporate Gross Operating Surpwus (i.e. profits), by de controwwing country of de company (note: a materiaw part of de Irish figure is awso from U.S. tax inversions who are U.S.–controwwed). Eurostat (2015).[87]

Unwike de TP and IP–based BEPS toows, Section 110 SPVs must fiwe pubwic accounts wif de Irish CRO, which was how de above abuses were discovered in 2016–17. In February 2018 de Centraw Bank of Irewand upgraded de wittwe-used L–QIAIF regime to give de same tax benefits as Section 110 SPVs but widout having to fiwe pubwic accounts. In June 2018, de Centraw Bank reported dat €55 biwwion of U.S.–owned distressed Irish assets, eqwivawent to 25% of Irish GNI*, moved out of Irish Section 110 SPVs and into L–QIAIFs.[116]

As de IP is a virtuaw internaw asset, it can be repwenished wif each technowogy (or wife sciences) product cycwe (e.g. new virtuaw IP assets created offshore and den bought by de Irish subsidiary, wif internaw virtuaw woans, for higher prices). The Green Jersey dus gives a perpetuaw BEPS toow, wike de doubwe Irish, but at a much greater scawe dan de doubwe Irish, as de fuww BEPS effect is capitawized on day one.

Experts expect de U.S Tax Cuts and Jobs Act of 2017 ("TCJA") GILTI-regime to neutrawise some Irish BEPS toows, incwuding de singwe mawt and de doubwe Irish.[122] Because Irish intangibwe capitaw awwowances are accepted as U.S. GILTI deductions,[123] de "Green Jersey" now enabwes U.S. muwtinationaws to achieve net effective U.S. corporate tax rates of 0% to 3% via TCJA's participation rewief.[124] As Microsoft's main Irish BEPS toows are de singwe mawt and de doubwe Irish, in June 2018, Microsoft was preparing a "Green Jersey" Irish BEPS scheme.[121] Irish experts, incwuding Seamus Coffey, Chairman of de Irish Fiscaw Advisory Counciw and audor of de Irish State's 2017 Review of Irewand's Corporation Tax Code,[125][126] expects a boom in U.S. on-shoring of virtuaw internaw IP assets to Irewand, via de Green Jersey BEPS toow (e.g. under de capitaw awwowances for intangibwe assets scheme).[127]

QIAIFs have been used in tax avoidance on Irish assets,[137][138][139][140] on circumventing internationaw reguwations,[141] on avoiding tax waws in de EU and de U.S.[142][143] QIAIFs can be combined wif Irish corporate BEPS toows (e.g. de Orphaned Super–QIF), to create routes out of de Irish corporate tax system to Luxembourg,[4] de main Sink OFC for Irewand.[144][145][146] It is asserted dat a materiaw amount of assets in Irish QIAIFs, and de ICAV wrapper in particuwar, are Irish assets being shiewded from Irish taxation, uh-hah-hah-hah.[147][148]Offshore magic circwe waw firms (e.g. Wawkers and Mapwes and Cawder, who have set up offices in Irewand), market de Irish ICAV as a superior wrapper to de Cayman SPC (Mapwes and Cawder cwaim to be a major architect of de ICAV),[149][150][151] and dere are expwicit QIAIF ruwes to hewp wif re-domiciwing of Cayman/BVI funds into Irish ICAVs.[152]

Gwobaw wegaw firm Baker McKenzie,[162] representing a coawition of 24 muwtinationaw U.S. software firms, incwuding Microsoft, wobbied Michaew Noonan, as [Irish] minister for finance, to resist de [OECD MLI] proposaws in January 2017. In a wetter to him de group recommended Irewand not adopt articwe 12, as de changes "wiww have effects wasting decades" and couwd "hamper gwobaw investment and growf due to uncertainty around taxation". The wetter said dat "keeping de current standard wiww make Irewand a more attractive wocation for a regionaw headqwarters by reducing de wevew of uncertainty in de tax rewationship wif Irewand's trading partners".

Tax haven investigator Nichowas Shaxson documents how Irewand's captured state uses a compwex, and "siwoed", network of Irish privacy and Irish data protection waws to navigate around de fact dat most of its tax toows are OECD–whitewisted,[163][164] and derefore must be transparent to some State entity.[165] For exampwe, Irish QIAIFs (and L–QIAIFs) are reguwated by de Centraw Bank of Irewand and must provide de Bank wif detaiws of deir financiaws. However, de 1942 Centraw Bank Secrecy Act prevents de Centraw Bank from sending dis data to de Revenue Commissioners.[136] Simiwarwy, de Centraw Statistics Office (Irewand) stated it had to restrict its pubwic data rewease in 2016–17 to protect de Appwe's identity during its 2015 BEPS action, because de 1993 Centraw Statistics Act prohibits use of economic data for reveawing such activities.[166] When de EU Commission fined Appwe €13 biwwion for iwwegaw State aid in 2016, dere were no officiaw records of any discussion of de tax deaw given to Appwe outside of de Irish Revenue Commissioners because such data is awso protected.[167] When Tim Cook stated in 2016 dat Appwe was de wargest tax-payer in Irewand, de Irish Revenue Commissioners qwoted Section 815A of de 1997 Tax Acts dat prevents dem discwosing such information, even to members of Daiw Eireann, or de Irish Department of Finance (despite de fact dat Appwe is circa one-fiff of Irewand's GDP).[168]

Commentators note de "pwausibwe deniabiwity" provided by Irish privacy and data protection waws, dat enabwe de State to function as a tax haven whiwe maintaining OECD compwiance. They ensure de State entity reguwating each tax toow are "siwoed" from de Irish Revenue, and pubwic scrutiny via FOI waws.[169][43][170]

In February 2019, The Guardian reported on weaked Facebook internaw reports reveawing de infwuence Facebook had on de Irish State, to which Cambridge University academic John Naughton stated: "de weak was “expwosive” in de way it reveawed de “vassawage” of de Irish state to de big tech companies".[171]

EU Commission's outwine of Appwe's hybrid–doubwe IrishBEPS tax structure in Irewand, dat used two branches inside a singwe company based on private ruwings from de Irish Revenue Commissioners in 1991 and 2007.[185]

Margrede Vestager European Commissioner for Competition who wed case SA:38373 on iwwegaw State aid to Appwe in Irewand (2004–2014).[185]

The disconnect between de ETR of 12.5% cwaimed by de Irish State and its advisors, and de actuaw ETRs of 2.2–4.5% cawcuwated by independent experts, is because de Irish tax code considers a high percentage of Irish income as not being subject to Irish taxation, due to various excwusions and deductions. The gap of 12.5% vs. 2–4% impwies dat weww over two-dirds of corporate profits booked in Irewand are excwuded from Irish corporate taxation (see Irish ETR).

This sewective treatment awwowed Appwe to pay an effective corporate tax rate of 1 per cent on its European profits in 2003 down to 0.005 per cent in 2014.

Sawary taxes, VAT, and CGT for Irish residents are in wine wif rates of oder EU–28 countries, and tend to be swightwy higher dan EU–28 averages in many cases. Because of dis, Irewand has a speciaw wower sawary tax rate scheme, and oder tax bonuses, for empwoyees of foreign muwtinationaws earning over €75,000 ("SARP").[186]

Pascaw Saint-Amans, OECD Director for Tax Powicy and Administration, testifying to a U.S. Senate Finance Committee (Juwy 2014). On de 23 Juwy 2013, Saint-Amans towd an Irish Oireachtas Finance Committee dat: Irewand does not meet any of de organisation’s criteria to be defined as a tax haven, uh-hah-hah-hah.[5] By 2017, onwy Trinidad & Tobago was on de OECD's wist of tax havens.[188]

EU and U.S. studies dat attempted to find a consensus on de definition of a tax haven, have concwuded dat dere is no consensus (see tax haven definitions).[189]

Most Irish BEPS toows and QIAIFs are OECD–whitewisted (and can dus avaiw of Irewand's 70 biwateraw tax treaties),[163][164] and derefore whiwe Irewand couwd meet de first OECD test, it faiws de second and dird OECD tests.[5] The fourf OECD test (‡) was widdrawn by de OECD in 2002 on protest from de U.S., which indicates is a powiticaw dimension to de definition, uh-hah-hah-hah.[194][19] In 2017, onwy one jurisdiction, Trinidad & Tobago, met de 1998 OECD definition of a tax haven (Trinidad & Tobago is not one of de 35 OECD member countries), and de definition has fawwen into disrepute.[188][195][196]

Tax haven academic James R. Hines Jr. notes dat OECD tax haven wists never incwude de 35 OECD member countries (Irewand is a founding OECD member).[27] The OECD definition was produced in 1998 as part of de OECD's investigation into Harmfuw Tax Competition: An Emerging Gwobaw Issue.[197] By 2000, when de OECD pubwished deir first wist of 35 tax havens,[198] it incwuded no OECD member countries as dey were now aww considered to have engaged in de OECD's Gwobaw Forum on Transparency and Exchange of Information for Tax Purposes (see § Externaw winks). Because de OECD has never wisted any of its 35 members as tax havens, Irewand, Luxembourg, de Nederwands and Switzerwand are sometimes referred to as de "OECD tax havens".[73]

Whiwe by 2017, de OECD onwy considered Trinidad and Tobago to be a tax haven,[5] in 2017 de EU produced a wist of 17 tax havens, pwus anoder 47 jurisdictions on de "grey wist",[203] however, as wif de OECD wists above, de EU wist did not incwude any EU-28 jurisdictions.[204] Onwy one of de EU's 17 bwackwisted tax havens, namewy Samoa, appeared in de Juwy 2017 Top 20 tax havens wist from CORPNET.

The EU Commission was criticised for not incwuding Irewand, Luxembourg, de Nederwands, Mawta and Cyprus,[205][206] and Pierre Moscovici, expwicitwy stated to an Irish State Oireachtas Finance Committee on 24 January 2017: Irewand is not a tax haven,[6] awdough he subseqwentwy cawwed Irewand and de Nederwands "tax bwack howes" on 18 January 2018.[15][207]

Distortion of GDP/GNP. BEPS fwows infwate de haven's GDP; proxies are GDP-per-capita (Irewand is 3rd), and deviation of GDP/GNI from 1 (Irewand is now 1st).[214]

Hyper–profitabiwity of foreign muwtinationaws. Profit shifting infwates profitabiwity in de tax haven; de proxy is de GAAP profits of foreign companies.[215]

The Hines–Rice paper showed dat wow foreign tax rates [from tax havens] uwtimatewy enhance U.S. tax cowwections.[216] Hines' insight dat de U.S. is de wargest beneficiary from tax havens was confirmed by oders,[9] and dictated U.S. powicy towards tax havens, incwuding de 1996 "check-de-box"[o] ruwes, and U.S. hostiwity to OECD attempts in curbing Irewand's BEPS toows.[p][194] Under de 2017 U.S. TCJA, U.S. muwtinationaws paid a 15.5% repatriation tax on de circa $1 triwwion in untaxed cash buiwt up in gwobaw tax havens from 2004–2017.[q] Had dese U.S. muwtinationaws paid foreign taxes, dey wouwd have buiwt up sufficient foreign tax credits to avoid paying U.S. taxes. By awwowing U.S. muwtinationaws to use gwobaw tax havens, de U.S. excheqwer received more taxes, at de expense of oder countries, as Hines predicted in 1994.

Severaw of Hines' papers on tax havens, incwuding de cawcuwations of de Hines–Rice 1994 paper, were used in de finaw report by de U.S. President's Counciw of Economic Advisors dat justified de U.S. Tax Cuts and Jobs Act of 2017, de wargest U.S. tax reform in a generation, uh-hah-hah-hah.[208]

The Irish State dismisses academic studies which wist Irewand as a tax haven as being "out-of-date", because dey cite de 1994 Hines–Rice paper.[217][218] The Irish State ignores de fact dat bof Hines, and aww de oder academics, devewoped new wists; or dat de Hines–Rice 1994 paper is stiww considered correct (e.g. per de 2017 U.S. TCJA wegiswation).[208] In 2013, de Department of Finance (Irewand) co-wrote a paper wif de Irish Revenue Commissioners, which dey had pubwished in de State-sponsored ESRI Quarterwy, which found de onwy sources wisting Irewand as a tax haven were:[191][r]

"Third, because of a rader obscure, but nonedewess infwuentiaw paper by Hines and Rice dating back to 1994."

This 2013 Irish State-written paper den invoked de § OECD 1998 definition of a tax haven, four years younger dan Hines–Rice, and since discredited, to show dat Irewand was not a tax haven, uh-hah-hah-hah.[191]

The fowwowing is from a June 2018 Irish Independent articwe by de CEO of de key trade body dat represents aww U.S. muwtinationaws in Irewand on de 1994 Hines–Rice paper:

However, it wooks wike de 'tax haven' narrative wiww awways be wif us - and typicawwy dat narrative is based on studies and data of 20 to 30 years' vintage or even owder. It's a bit wike cawwing out Irewand today for being homophobic because up to 1993 same-sex activity was criminawised and ignoring de joyous day in May 2015 when Irewand became de first country in de worwd to introduce marriage eqwawity by popuwar vote.

— Mark Redmond, President American Chamber of Commerce in Irewand, 21 June 2018[219][220]

Long Room, Trinity Cowwege Dubwin ("TCD"). In 2018, TCD wost its pwace as Irewand's onwy university in de worwd's top 100 ranking, fawwing to 104,[221] but by 2019 had fawwen to 120.[222]

In a wess technicaw manner to de rebuttaws by de Irish State, de wabews have awso drawn responses from weaders in de Irish business community who attribute de vawue of U.S. investment in Irewand to Irewand's uniqwe tawent base. At €334 biwwion, de vawue of U.S. investment in Irewand is warger dan Irewand's 2016 GDP of €291 biwwion (or 2016 GNI* of €190 biwwion), and warger dan totaw aggregate U.S. investment into aww BRIC countries.[219] This uniqwe tawent base is awso noted by IDA Irewand, de State body responsibwe for attracting inward investment, but never defined beyond de broad concept.[223]

Arts Bwock, University Cowwege Dubwin ("UCD"). In 2018, UCD was Irewand's second-ranked university at 193 in de worwd ranking wist,[221] but in 2019 feww to de 201–250 group.[222]

Irewand has no university in de top 100.[222][224] Irish education does not appear to be distinctive.[225] Irewand has a high % of dird-wevew graduates, but dis is because it re-cwassified many technicaw cowweges into degree-issuing institutions in 2005-08. This is bewieved to have contributed to de decwine of its weading universities, of which dere are barewy two weft in de top 200 (i.e. a qwawity over qwantity issue).[221][226][227] Irewand continues to pursue dis strategy and is considering re-cwassifying de remaining Irish technicaw institutes as universities for 2019.[228]

Irish commentators provide a perspective on Irewand's "tawent base". The State appwies an "empwoyment tax"[s] to U.S. muwtinationaws using Irish BEPs toows. To fuwfiw deir Irish empwoyment qwotas, some U.S. technowogy firms perform wow-grade wocawisation functions in Irewand which reqwires foreign empwoyees speaking gwobaw wanguages (whiwe many U.S. muwtinationaws perform higher-vawue software engineering functions in Irewand, some do not[238][101]). These empwoyees must be sourced internationawwy. This is faciwitated via a woose Irish work-visa program.[239] This Irish "empwoyment tax" reqwirement for use of BEPS toows, and its fuwfiwment via foreign work-visas, is a driver of Dubwin's housing crisis.[240] This is consistent wif a bias to property devewopment-wed economic growf, favored by de main Irish powiticaw parties (see Abuse of QIAIFs).[241]

Onwy U.S. muwtinationaws use Irewand:[10] Irish corporate gross operating surpwus by de controwwing country of de company (note: a materiaw part of de Irish figure are from U.S. tax inversions who are awso U.S.–controwwed companies). Eurostat (2015)

U.S. muwtinationaws book over hawf of deir non–U.S. profits in tax havens by using BEPS toows (2016 BEA).[7][10]

In anoder wess technicaw rebuttaw, de State expwains Irewand's high ranking in de estabwished "proxy tests" for tax havens as a by–product of Irewand's position as preferred hub for gwobaw "knowwedge economy" muwtinationaws (e.g. technowogy and wife sciences), "sewwing into EU–28 markets".[242] When de Centraw Statistics Office (Irewand) suppressed its 2016-2017 data rewease to protect Appwe's Q1 2015 BEPS action (i.e. weprechaun economics), it reweased a paper on "meeting de chawwenges of a modern gwobawised knowwedge economy".[243]

Irewand has no non–U.S./non–UK muwtinationaws in its top 50 companies by revenue, and onwy one by empwoyees (German retaiwer Lidw who sewws into Irewand).[244] The UK muwtinationaws in Irewand are eider sewwing into Irewand (e.g. Tesco), or date pre–2009, after which de UK overhauwed its tax system to a "territoriaw tax" modew. Since 2009, de U.K has become a corporate tax haven (see U.K. transformation).[245][246] Since dis transformation, no major UK firms have moved to Irewand and most UK corporate tax inversions to Irewand returned;[247] and Irewand has faiwed to win Brexit financiaw services firms.[13][14]

Rader dan a "gwobaw knowwedge hub" for "sewwing into Europe", Irewand is a base for U.S. muwtinationaws, wif sufficient IP to use Irewand's BEPS toows, to shiewd non–U.S. revenues from U.S. taxation, uh-hah-hah-hah.[10]

No oder non-haven OECD country records as high a share of foreign profits booked in tax havens[t] as de United States. [...] This suggests dat hawf of aww de gwobaw profits shifted to tax havens
are shifted by U.S. muwtinationaws. By contrast, about 25% accrues to E.U. countries, 10% to de rest of de OECD, and 15% to devewoping countries (Tørswøv et aw., 2018).

In 2018, de U.S. converted into a hybrid "territoriaw" tax system (de U.S. was one of de wast remaining pure "worwdwide" tax systems). Post dis conversion, U.S. effective tax rates for IP–heavy U.S. muwtinationaws are very simiwar to de effective tax rates dey wouwd incur if wegawwy headqwartered in Irewand, even net of fuww Irish BEPS toows wike de doubwe Irish. This represents a substantive chawwenge to de Irish economy (see effect of U.S. Tax Cuts and Jobs Act).[257][258] However, § Technicaw issues wif-TCJA mean some Irish BEPS toows, such as Appwe's § Green Jersey, have been enhanced.

Irewand's recent expansion into traditionaw tax haven services (e.g. Cayman Iswand and Luxembourg type ICAVs and L–QIAIFs) is a diversifier from U.S. corporate tax haven services.[259]Brexit has been disappointing for Irewand in its faiwure to attract any London financiaw services firms, underwying Irewand's traditionaw weakness in non–U.S. corporates. Brexit has wed to growf in UK centric tax-waw firms (incwuding offshore magic circwe firms), setting up offices in Irewand to handwe traditionaw tax haven services for cwients.[260]

Whiwe Irewand's devewopment into traditionaw tax haven toows (e.g. ICAVs and L–QIAIFs) is more recent, Irewand's status as a corporate tax haven has been noted since 1994 (de first Hines–Rice tax haven paper),[17] and discussed in de U.S. Congress for a decade.[49] A wack of progress, and deways, in addressing Irewand's corporate tax BEPS toows is apparent:

Irewand's most famous BEPS toow, de doubwe Irish, attributed to creating de wargest buiwd-up in untaxed cash in history, was documented in 2004.[262] The U.S. did not seek its cwosure, and it was de EU dat forced Irewand to cwose de doubwe Irish BEPS toow in October 2014,[263] however, existing users such as Googwe and Facebook, were given a five–year deway to January 2020 before cwosure.[264]

Irewand's repwacement for de doubwe Irish toow, de singwe mawt, was awready up and running in 2014 (and used by Microsoft and Awwergan in 2017),[265][266] and has as yet not received any US–EU–OECD attention, uh-hah-hah-hah. It is noted dat since de cwosure of de doubwe Irish in 2015, de use of Irish BEPS toows increased materiawwy;[267][268]

Germany has condemned Irewand for its tax toows,[68] however, Germany bwocked de EU Commission's push for country-by-country reporting ("CbCr") which wouwd effectivewy end EU tax havens,[271] and de German administration neutrawised its own Parwiament's 2018 "Royawty Barrier" by exempting aww OECD–approved IP–schemes (i.e. aww of Irewand's BEPS toows), see German Lizenzschranke;[272]

Tax haven economist, Gabriew Zucman, showed in 2018 dat most corporate tax disputes are between high-tax jurisdictions, and not between high-tax and wow-tax corporate tax haven jurisdictions. In fact, Zucman's (et awia) anawysis shows dat disputes wif de major corporate tax havens of Irewand, Luxembourg and de Nederwands, are rare.[273][18]

Tax haven experts expwain dese contradictions as resuwting from de different agendas of de major OECD taxing audorities, and particuwarwy de U.S.,[7] and Germany, who whiwe not demsewves considered tax havens or corporate tax havens, rank #2 and #7 respectivewy in de 2018 Financiaw Secrecy Index of tax secrecy jurisdictions:[274][117][275][276]

U.S. Perspective I. Pre de Tax Cuts and Jobs Act of 2017 ("TCJA"), de U.S. had one of de highest gwobaw rates of corporation tax at 35%.[277] Awwowing U.S. muwtinationaws to "check-de-box"[o][278] The aggregate worwdwide tax rates of U.S. muwtinationaws is far wower dan 35%. This compromise was not unanimouswy supported in Washington and some U.S. muwtinationaws stiww inverted to Irewand.[96] Tax academics have wabewwed Washington's concession to U.S. muwtinationaws as de exorbitant tax priviwege (and wink it to de wider economic concept of U.S. exorbitant priviwege).[7]

U.S. Perspective II. If de U.S. forced U.S. muwtinationaws not to use tax havens, den U.S. muwtinationaws wouwd be forced to pay higher taxes in de gwobaw jurisdictions in which dey operate. As first shown in de 1994 Hines–Rice paper, de U.S. has wong been aware dat by awwowing U.S. muwtinationaws to use BEPS toows from gwobaw corporate tax havens, increases de uwtimate taxes received by de U.S. excheqwer.[8][9] The 2017 TCJA U.S. repatriation tax of 15.5% wouwd not have been payabwe had U.S. muwtinationaws been paying fuww foreign taxes on deir non–U.S. income.[279]

EU Perspective I. The EU is de worwd's wargest net exporting bwock. Many EU countries derefore awso rewy on IP–based BEPS toows to re-charge gross profits from gwobaw sawes of automobiwes, chemicaws, and oder exports, back to de EU. Because most EU countries run a "territoriaw" tax system, which awwows wower tax rates for foreign sourced income, EU muwtinationaws do not need to use Irish BEPS toows as de U.S. muwtinationaws do;[280] Tax haven expert, James R. Hines Jr., saw dis when researching why German muwtinationaws make so wittwe use of tax havens in 2016.[248]

EU Perspective II. A second noted EU perspective is dat if U.S. muwtinationaws need Irewand as a BEPS hub because de pre–TCJA U.S. "worwdwide" tax system did not enabwe dem to charge IP direct from de U.S. (widout incurring warger U.S. taxes), den de money Irewand extracts from dese U.S. muwtinationaws (e.g. some Irish corporate taxes and Irish sawaries), are stiww a net positive for de aggregate EU–28 economy. Irewand and oder so-cawwed "EU tax havens", can extract EU "rents" from U.S. muwtinationaws, which EU muwtinationaws don't have to pay.

Before de passing of de TCJA in December 2017, de U.S. was one of eight remaining jurisdictions to run a "worwdwide" taxation system, which was de principaw obstacwe to U.S. corporate tax reform, as it was not possibwe to differentiate between de source of income.[u] The seven oder "worwdwide" tax systems, are: Chiwe, Greece, Irewand, Israew, Korea, Mexico, and Powand.[281]

Tax experts expect de anti-BEPS provisions of de TCJA's new hybrid "territoriaw" taxation system, de GILTI and BEAT tax regimes, to neutrawize some Irish BEPS toows (e.g. de doubwe Irish and de singwe mawt). In addition, de TCJA's FDII tax regime makes U.S.–controwwed muwtinationaws indifferent as to wheder dey charge-out deir IP from de U.S. or from Irewand, as net effective tax rates on IP, under de FDII and GILTI regimes, are very simiwar. Post-TCJA, S&P500 IP–heavy U.S.–controwwed muwtinationaws, have guided 2019 tax rates dat are simiwar, wheder wegawwy headqwartered in Irewand or de U.S.[h][284][11]

Tax academic, Mihir A. Desai, in a post-TCJA 26 December 2017 interview in de Harvard Business Review said dat: "So, if you dink about a wot of technowogy companies dat are housed in Irewand and have massive operations dere, dey’re not going to maybe need dose in de same way, and dose can be rewocated back to de U.S.[285]

It is expected Washington wiww be wess accommodating to U.S. muwtinationaws using Irish BEPS toows and wocating IP in tax havens.[259] The EU Commission has awso become wess towerant of U.S. muwtinationaw use of Irish BEPS toows, as evidenced by de €13 biwwion fine on Appwe for Irish tax avoidance from 2004–2014. There is widespread unhappiness of Irish BEPS toows in Europe, even from oder tax havens.[286]

"Now dat [U.S.] corporate tax reform has passed, de advantages of being an inverted company are wess obvious"

— Jami Rubin, Managing Director and Head of Life Sciences Research Group, Gowdman Sachs (March 2018).[11]

Whiwe de Washington and EU powiticaw compromises towerating Irewand as a corporate tax haven may be eroding, tax experts point to various technicaw fwaws in de TCJA which, if not resowved, may actuawwy enhance Irewand as a U.S. corporate tax haven:[122][123][287][288]

A June 2018 IMF country report on Irewand, whiwe noting de significant exposure of Irewand's economy to U.S. corporates, concwuded dat de TCJA may not be as effective as Washington expects in addressing Irewand as a U.S. corporate tax haven, uh-hah-hah-hah. In writing its report, de IMF conducted confidentiaw anonymous interviews wif Irish corporate tax experts.[290]

Some tax experts, noting Googwe and Microsoft's actions in 2018, assert dese fwaws in de TCJA are dewiberate, and part of de U.S. Administration's originaw strategy to reduce aggregate effective gwobaw tax rates for U.S. muwtinationaws to circa 10–15% (i.e. 21% on U.S. income, and 3% on non–U.S. income, via Irish BEPS toows).[291] There has been an increase in U.S. muwtinationaw use of Irish intangibwe capitaw awwowances, and some tax experts bewieve dat de next few years wiww see a boom in U.S. muwtinationaws using de Irish "Green Jersey" BEPS toow and on-shoring deir IP to Irewand (rader dan de U.S.).[127]

As discussed in § Hines–Rice 1994 definition and § Source of contradictions, de U.S. Treasury's corporation tax powicy seeks to maximise wong-term U.S. taxes paid by using corporate tax havens to minimise near-term foreign taxes paid. In dis regard, it is possibwe dat Irewand stiww has a wong-term future as a U.S. corporate tax haven, uh-hah-hah-hah.

It is undoubtedwy true dat some American business operations are drawn offshore by de wure of wow tax rates in tax havens; neverdewess, de powicies of tax havens may, on net, enhance de U.S. Treasury's abiwity to cowwect tax revenue from American corporations.

^Irewand has awso been wabewwed an "offshore financiaw centre" ("OFC") and awso a "Conduit OFC", which tax academics consider to be synomonous wif tax havens, however, unwike de tax haven wabew, Irewand does not raise formaw objection to OFC wabews

^ abThe U.S. muwtinationaw use of Irish BEPS schemes such as de Doubwe Irish are sometimes mis-understood as being onwy used for EU–sourced revenues. For exampwe, in 2016, Facebook recorded gwobaw revenues of $27 biwwion, whiwe Facebook in Irewand paid €30 miwwion in Irish tax on Irish revenues of €13 biwwion (approximatewy hawf of aww gwobaw revenues).[249] Simiwarwy, when de EU introduced de GDPR reguwations in 2018, Facebook discwosed dat aww of its non–U.S. accounts (circa 1.9 biwwion, of which 1.5 biwwion were non–E.U), were wegawwy based in Dubwin, uh-hah-hah-hah.[250] Simiwarwy, Googwe is awso bewieved to run most of its non–U.S. sawes revenue and profits drough its Dubwin operation, uh-hah-hah-hah.[251][252]

^Bof de IMF, and de Conduit and Sink OFCs study, show dat Luxembourg is by far de most popuwar destination for capitaw weaving Irewand; The IMF estimates dat over hawf of de capitaw weaving Irewand goes to Luxembourg.[4]

^Non–U.S. tax academics have wabewwed Washington's towerance of U.S. muwtinationaws using tax havens as an exorbitant tax priviwege,[7] however U.S. tax academics (Hines 2010,[8] Dryeng and Lindsey 2009[9]), have shown dat U.S. muwtinationaw use of tax havens (U.S. muwtinationaws are de wargest users of tax havens in de worwd[7][10]), has maximised wong-term U.S. excheqwer, and/or sharehowder returns, at de expense of oder higher-tax foreign countries (see § Source of contradictions)

^The TCJA system is described as hybrid, because it stiww forces minimum U.S. tax rates on foreign income under de TCJA GILTI regime

^U.S. corporates awso incwudes U.S. tax inversions to Irewand such as Medtronic, whose effective operations, incwuding executive team and operationaw headqwarters, are aww U.S. based.

^Whiwe dere have been various promotionaw articwes by de countries targeting London financiaw services jobs (e.g. Paris, Frankfurt, Luxembourg and Dubwin), Bwoomberg created a weague tabwe to definitivewy count de number of actuaw jobs dat were moving and to which destinations.[13][14]

^These are structures set up to rivaw and compete for business from traditionaw tax haven toows such as de Cayman Iswands SPC, for which Irish QIAIFs have specific provisions to support transferring SPC assets widout tax weakage

^ abIrewand was wisted as a manufacturing tax haven in de U.S. Internaw Revenue Service (IRS) (1981) Tax Haven and Their Use by United States Taxpayers (The Gordon Report). Washington, D.C.: Speciaw Counciw for Internationaw Taxation, Internaw Revenue Service

^The finaw report by tbe Counciw of Economic Advisors on de economic deory underpinning de TCJA, awso used oder tax papers from Hines, and awso referenced Mihir A. Deasi and Dhammika Dharmapawa's work, two of Hines' co–audors in tax haven research

^ abBefore 1996, de United States, wike oder high-income countries, had anti-avoidance ruwes—known as “controwwed foreign corporations” provisions—designed to immediatewy tax in de United States some foreign income (such as royawties and interest) conducive of profit shifting. In 1996, de IRS issued reguwations dat enabwed U.S. muwtinationaws to avoid some of dese ruwes by ewecting to treat deir foreign subsidiaries as if dey were not corporations but disregarded entities for tax purposes. This move is cawwed “checking de box” because dat is aww
dat needs to be done on IRS form 8832 to make it work and use Irish BEPS toows on non–U.S. revenues was a compromise to keep U.S. muwtinationaws from weaving de U.S. (page 10.)[7]

^Under Section 291A of de 1997 Irish Tax and Consowidated Acts, users of Irish BEPS toows must conduct a "rewevant trade" and perform "rewevant activities" in Irewand to give de BEPS toow a degree of credibiwity and substance.[235][236][237] In effect, it can eqwate to an "empwoyment tax" on de Irish subsidiary, however, to de extent dat de "rewevant activities" are needed widin de Group (e.g. dey are performing reaw tasks), den de effect of dis "empwoyment tax" is mitigated. Whiwe de Irish State has never pubwished de empwoyment metrics for using Irish BEPS toows, de evidence is dat even where de "rewevant activities" were compwetewy unnecessary, de "empwoyment tax" eqwates to circa 2–3% of revenues (see here).

^Before de passing of de TCJA in December 2017, de U.S. was one of eight remaining jurisdictions to run a "worwdwide" taxation system, which was de principaw obstacwe to U.S. corporate tax reform, as it was not possibwe to differentiate between de source of income. The seven oder "worwdwide" tax systems, are: Chiwe, Greece, Irewand, Israew, Korea, Mexico, and Powand.[281] The positive experience of de UK switch to a "territoriaw" system in 2009–12,[245][246] and de Japanese switch to a "territoriaw" system in 2009,[282] amongst oders,[283] was continuawwy highwighted by U.S. tax academics.

^ ab"Dáiw Éireann debate - Thursday, 23 Nov 2017". House of de Oireachtas. 23 November 2017. Pearse Doherty: It was interesting dat when [MEP] Matt Cardy put dat to de Minister's predecessor (Michaew Noonan), his response was dat dis was very unpatriotic and he shouwd wear de green jersey. That was de former Minister's response to de fact dere is a major woophowe, wheder intentionaw or unintentionaw, in our tax code dat has awwowed warge companies to continue to use de doubwe Irish [cawwed singwe mawt].

^ abcde"OECD Chief: 'Irewand is not a tax haven'". TheJournaw.ie. 23 Juwy 2013. Pascaw Saint Amans, de director of de OCED’s centre for tax powicy and administration, towd an Oireachtas Committee today dat Irewand does not meet any of de organisation’s criteria to be defined as a tax haven – dat dere is no taxes, no transparency and no exchange of information

^ abcde"Irewand is not a Tax Haven - EU Commissioner, Moscovici". Chartered Accountants Irewand. 27 January 2017. European Commissioner for Economic and Financiaw Affairs, Taxation and Customs Pierre Moscovici was in Dubwin on Tuesday, appearing before de Oireachtas Finance Committee where he faced qwestions from TDs and Senators on de rewaunched Common Consowidated Corporate Tax Base (CCCTB).

^ ab"How Irewand became a tax haven and offshore financiaw centre". Nichowas Shaxson, Tax Justice Network. 11 November 2015. The wiwwingness to brush dirt under de carpet to support de financiaw sector, and an eqwating of dese powicies wif patriotism (sometimes known in Irewand as de Green Jersey agenda,) contributed to de remarkabwe reguwatory waxity wif massive impacts in oder nations (as weww as in Irewand itsewf) as gwobaw financiaw firms sought an escape from financiaw reguwation in Dubwin, uh-hah-hah-hah.

^ ab"TAX JUSTICE NETWORK: Irewand Financiaw Secrecy Index Country Report 2014"(PDF). Tax Justice Network. November 2014. Misweadingwy, studies cited by de Irish Times and oder outwets suggest dat de effective tax rate is cwose to de headwine 12.5 percent rate – but dis is a fictionaw resuwt based on a deoreticaw 'standard firm wif 60 empwoyees' and no exports: it is entirewy inappwicabwe to transnationaws. Though dere are various ways to cawcuwate effective tax rates, oder studies find rates of just 2.5-4.5 percent.

^ abSenator Carw Levin; Senator John McCain (21 May 2013). "Offshore Profit Shifting and de U.S. Tax Code - Part 2 (Appwe Inc.)". US Senate. p. 3. A number of studies show dat muwtinationaw corporations are moving "mobiwe" income out of de United States into wow or no tax jurisdictions, incwuding tax havens such as Irewand, Bermuda, and de Cayman Iswands.

^"Dubwin Moves to Bwock Controversiaw Tax Gambit". Waww Street Journaw. 15 October 2013. At weast 125 major U.S. companies have registered severaw hundred subsidiaries or investment funds at 70 Sir John Rogerson's Quay, a seven-story buiwding in Dubwin's dockwands, according to a review of government and corporate records by The Waww Street Journaw. The common dread is de buiwding's primary resident: Madeson, an Irish waw firm dat speciawizes in ways companies can use Irish tax waw.

^"Tax avoidance: The Irish inversion". Financiaw Times. 29 Apriw 2014. That undermines Irewand's insistence dat it is not a tax haven, making it more difficuwt to defend its system in an internationaw cwimate dat is turning sharpwy against tax avoidance.

^"Man Making Irewand Tax Avoidance Hub Proves Locaw Hero". Bwoomberg. 28 October 2013. Googwe Inc., Facebook Inc. and LinkedIn Corp. wound up in Irewand because dey couwd reduce deir tax biwws. Their success is weading European and U.S. powiticians to wabew de country a tax haven dat must change its ways

^"IRISH TIMES EDITORIAL Corporate tax: defending de indefensibwe". The Irish Times. 2 December 2017. There is a broad consensus dat Irewand must defend its 12.5 per cent corporate tax rate. But dat rate is defensibwe onwy if it is reaw. The great risk to Irewand is dat we are trying to defend de indefensibwe. It is morawwy, powiticawwy and economicawwy wrong for Irewand to awwow vastwy weawdy corporations to escape de basic duty of paying tax. If we don't recognise dat now, we wiww soon find dat a key pwank of Irish powicy has become untenabwe.

^"Irewand Exports its Leprechaun". Counciw on Foreign Rewations. 11 May 2018. Irewand has, more or wess, stopped using GDP to measure its own economy. And on current trends [because Irish GDP is distorting EU–28 aggregate data], de eurozone taken as a whowe may need to consider someding simiwar.

^Gabriew Zucman; Thomas Tørswøv; Ludvig Wier (8 June 2018). "The Missing Profits of Nations∗"(PDF). Nationaw Bureau of Economic Research, Working Papers. p. 25. Profit shifting awso has a significant effect on trade bawances. For instance, after accounting for profit shifting, Japan, de UK, France, and Greece turn out to have trade surpwuses in 2015, in contrast to de pubwished data dat record trade deficits. According to our estimates, de true trade deficit of de United States was 2.1% of GDP in 2015, instead of 2.8% in de officiaw statistics—dat is, a qwarter of de recorded trade deficit of de United States is an iwwusion of muwtinationaw corporate tax avoidance.

^Reporter, Peter O'Dwyer (14 June 2018). "Irewand named as worwd's biggest tax haven". The Times. The Times U.K. Research conducted by academics at de University of Cawifornia, Berkewey and de University of Copenhagen estimated dat foreign muwtinationaws moved €90 biwwion of profits to Irewand in 2015 — more dan aww Caribbean countries combined.

^"How do vuwture funds expwoit Irish tax woophowes?". Irish Times. 17 October 2016. SPVs, QIAIFs and ICAVs. They're acronyms onwy corporate wonks couwd wove. But dey have entered de wexicon of de Dáiw in recent monds as Opposition members have highwighted how dese corporate structures have been used to great advantage by so-cawwed vuwture funds to minimise taxes on property bought at bargain basement prices in recent years.

^"IMF qweries wawyers and bankers on hundreds of IFSC SPV boards". The Irish Times. 30 September 2016. The Internationaw Monetary Fund (IMF) has raised concerns about instances where individuaw bankers and wawyers were appointed to hundreds of boards of unreguwated speciaw-purpose vehicwes in Dubwin's Internationaw Financiaw Services Centre.

^"State aid: Irewand gave iwwegaw tax benefits to Appwe worf up to €13 biwwion". EU Commission, uh-hah-hah-hah. 30 August 2016. The Commission's investigation concwuded dat Irewand granted iwwegaw tax benefits to Appwe, which enabwed it to pay substantiawwy wess tax dan oder businesses over many years. In fact, dis sewective treatment awwowed Appwe to pay an effective corporate tax rate of 1 percent on its European profits in 2003 down to 0.005 percent in 2014.

^"Irish Taoiseach rebuts Oxfam cwaim dat Irewand is a tax haven". Irish Times. 14 December 2016. But Mr Kenny noted dat Oxfam incwuded Irewand's 12.5 per cent corporation tax rate as one of de factors for deeming it a tax haven, uh-hah-hah-hah. "The 12.5 per cent is fuwwy in wine wif de OECD and internationaw best practice in having a wow rate and appwying it to a very wide tax base."

^"Effective Corporate Tax cawcuwations: 2.2%". Irish Times. 14 February 2014. A study by James Stewart, associate professor in finance at Trinity Cowwege Dubwin, suggests dat in 2011 de subsidiaries of U.S. muwtinationaws in Irewand paid an effective tax rate of 2.2 per cent.

^"Uses of Irewand for German Companies: Irish "Intewwectuaw Property" Tax of 2.5%"(PDF). Ardur Cox Law Firm. January 2012. p. 3. Intewwectuaw Property: The effective corporation tax rate can be reduced to as wow as 2.5% for Irish companies whose trade invowves de expwoitation of intewwectuaw property. The Irish IP regime is broad and appwies to aww types of IP. A generous scheme of capitaw awwowances in Irewand offers significant incentives to companies who wocate deir activities in Irewand. A weww-known gwobaw company [Accenture in 2009] recentwy moved de ownership and expwoitation of an IP portfowio worf approximatewy $7 biwwion to Irewand.

^ abJames K. Jackson (11 March 2010). "The OECD Initiative on Tax Havens"(PDF). Congressionaw Research Service. p. 7. As a resuwt of de Bush Administration’s efforts, de OECD backed away from its efforts to target “harmfuw tax practices” and shifted de scope of its efforts to improving exchanges of tax information between member countries.

^Ronen Pawan (1 October 2009). "History of Tax Havens". History and Powicy. The OECD is cwearwy iww-eqwipped to deaw wif tax-havens, not weast as many of its members, incwuding de UK, Switzerwand, Irewand and de Benewux countries are demsewves considered tax havens

^"Outbreak of 'so whatery' over EU tax haven bwackwist". Irish Times. 7 December 2017. It was certainwy an improvement on de wist recentwy pubwished by de Organisation for Economic Co-operation and Devewopment, which featured onwy one name – Trinidad & Tobago – but campaigners bewieve de European Union has much more to do if it is to prove it is serious about addressing tax havens.

^"EU puts 17 countries on tax haven bwackwist". Financiaw Times. 8 December 2017. EU members were not screened but Oxfam said dat if de criteria were appwied to pubwicwy avaiwabwe information de wist shouwd feature 35 countries incwuding EU members Irewand, Luxembourg, de Nederwands and Mawta

^"Irewand wabewwed a tax "bwack howe"". The Sunday Times. 19 January 2018. “Obviouswy many countries in de European Union are pwaces where aggressive tax optimisation finds its pwace,” Pierre Moscovici, de European commissioner for economic affairs and taxation, towd reporters in Brussews yesterday. “Some European countries are bwack howes. . . I want to address dis.”

^When de Irish State issued a pubwic statement refuting Gabriew Zucman's 2018 findings dat Irewand is de wargest BEPS hub in de worwd, Zucman immediatewy tweeted back a chart showing dat Irish-based U.S. corporates were de most profitabwe in de worwd.Gabriew Zucman (13 June 2018). ""Irewand is not a tax haven"..."

^"Irish tax haven wabew 'wrong'". Irish Examiner. 14 June 2018. A research paper naming Irewand as de "worwd's biggest tax haven" was fwawed as it used data more dan 20 years owd — but de perception couwd be harmfuw to de country's reputation, a weading economist has said.

^Mike Wiwwiams (HMRC Director of Internationaw Tax) (23 January 2015). "The inversion experience in de US and de UK"(PDF). HM Revenue and Customs. In 2007 to 2009, WPP, United Business Media, Henderson Group, Shire, Informa, Regus, Charter and Brit Insurance aww weft de UK. By 2015, WPP, UBM, Henderson Group, Informa and Brit Insurance have aww returned

^ abJames R. Hines Jr.; Anna Gumpert; Monika Schnitzer (2016). "Muwtinationaw Firms and Tax Havens". The Review of Economics and Statistics. 98 (4): 714. Germany taxes onwy 5% of de active foreign business profits of its resident corporations. [..] Furdermore, German firms do not have incentives to structure deir foreign operations in ways dat avoid repatriating income. Therefore, de tax incentives for German firms to estabwish tax haven affiwiates are wikewy to differ from dose of U.S. firms and bear strong simiwarities to dose of oder G–7 and OECD firms.

^Awex Barker; Vincent Bowand; Vanessa Houwder (October 2014). "Brussews in crackdown on 'doubwe Irish' tax woophowe". The Financiaw Times. Brussews is chawwenging de “doubwe Irish” tax avoidance measure prized by big U.S. tech and pharma groups, putting pressure on Dubwin to cwose it down or face a fuww-bwown investigation, uh-hah-hah-hah. [..] The initiaw enqwiries have signawwed dat Brussews wants Dubwin to caww time on de tax gambit, which has hewped Irewand become a hub for American tech and pharma giants operating in Europe.

^"Impossibwe Structures: tax outcomes overwooked by de 2015 tax Spiwwover anawysis"(PDF). Christian Aid. November 2017. p. 3. Figures reweased in Apriw 2017 show dat since 2015 dere has been a dramatic increase in companies using Irewand as a wow-tax or no-tax jurisdiction for intewwectuaw property (IP) and de income accruing to it, via a nearwy 1000% increase in de uptake of a tax break expanded between 2014 and 2017

^Whewan, Sean (12 September 2018). "How de U.S. corporation tax regime hewps U.S. business compete against de rest of de worwd". RTÉ News. That is certainwy one of de concwusions of a new working paper [by Gabriew Zucman et awia] on de U.S. corporation tax regime, and how it hewps U.S. business compete against de rest of de worwd. In short, de audors bewieve dat profit-shifting faciwitated by de U.S. tax code has given U.S. companies a huge competitive advantage over foreign rivaws – to de benefit of sharehowders in dose muwtinationaws

^Brad Setser (30 Juwy 2018). "Gone Fishing". Counciw on Foreign Rewations. [..] most of de profits booked by U.S. firms abroad continue to appear in a few wow tax jurisdictions, and weww, de resuwting data distortions are getting pretty big. I am pretty confident de U.S. tax reform didn't sowve de issue of profit-shifting.